According to PayPlan’s latest research, a staggering one million people in the UK will die before their personal debts are paid off.
Using a combination of our own data, statistics on the number of people living in debt from the Money Advice Service, and the national life expectancy for men and women, we’ve been able to calculate that 940,720 individuals will be unable to clear their outstanding debts within their lifetime.
The figures make for bleak reading – but as Jane Clack, PayPlan money adviser explains, it’s a situation that’s often compounded by a reticence from many to open up about their debt problems and seek help early:
“There is still a lot of stigma surrounding debt and it’s often brushed under the carpet.” she says. “By the time some people eventually reach out for help, it can be too late and there’s no realistic way that their debt will be cleared in their lifetime.”
“Our own data shows that 33% of people in debt prefer to handle it completely alone rather than talking to those closest to them. There are many different avenues for help out there and we want to encourage anyone who is struggling financially to tell a friend or family member and research the options available to them.”
Client case study
David Barber is one PayPlan client who faces remaining in debt for the rest of his life.
Forced to retire due to a throat problem, David had delivered training sessions for a marketing company for many years. His sessions lasted six hours but as his throat got worse, he knew he had to give it up.
Until then, David had managed to keep up with his credit commitments, but he was soon struggling and turned to PayPlan when he couldn’t keep up with the minimum repayments.
He was £35,000 in debt when he entered into a debt management plan five years ago and pays £50 a month.
“I know I will never pay it all off and that I will die in debt,” said David. “I’ve learnt to come to terms with it and live my life to the best that I can.”
Debt management – a critical step to a brighter future
Despite David’s, and many others’ longer-term prospects, entering a debt management plan does provide an element of light at the end of the tunnel.
In a further survey of PayPlan clients who had entered a Debt Management Plan*, virtually every single person reported an immediate sense of relief at the point they took the plan on. There was also a common feeling of regaining control.
Critically, for a significant percentage (43.4%), this proves enough. There’s no search for a miracle cure or a long-term vision of a debt-free life; just a need to make monthly payments more affordable. While repayment of debt over their lifetime may be a stretch too far for many, managing and making the best of a difficult situation is possible for all.
As David himself says: “I never imagined that after working so hard throughout my life that I would die in debt, but as long as I’ve got the energy, goals and creativity I will strive to create a better future for myself.”
Identifying when a person is in debt and needs help is critical to offering the right level of support. Find out more about the signs to look out for with our Quick Guide; ‘How do people in debt behave?’
*PayPlan survey of DMP clients August/ September 2013